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Andara, getting prepare to serve and be trusted by Microfinance Institutions in Indonesia

Fri August 20,2010

Jakarta, 20 August 2010 - After operating for more than one year, Bank Andara performance is getting better. On June 28, 2010, banks led by Paulus Wiranata have increased capital amounting to 40 billion. Bank Andara share capital increase was marked by the entry of new shareholders, namely Kreditanstalt für Wiederaufbau (KfW), a German development bank with an investment of 3 million euro (about 32.6 billion rupiah) and additional investment from Bank Andara shareholders, namely International Finance Corporation (IFC) in the amount of 7.9 billion rupiah, so the current total bank Andara capital amounted to 185.780 million rupiah. Bank Andara will continue to increase its capital to support business activities as a first wholesale bank and the only one in Indonesia, which supports the microfinance sector in Indonesia.

 

Moreover, until recently, Bank Andara has signed a Memorandum of Understanding with Perbarindo Bali, East Java, Yogyakarta, Central Java, West Java and Jakarta to implement liquidity program namely Andara Bersama BPR  (ABB). Bank Andara has implemented ABB programs in Bali and Jakarta, while for other regions will follow afterward. Andara Bersama BPR is fund collection and management services which originated from the members of “Andara Bersama BPR” itself and from Bank Andara. The fund collection and management is intended to maintain liquidity ratio of “Andara Bersama BPR” members during mismatch of fund. Currently, 135 BPR has become a member of ABB in order to reduce their liquidity risk and cooperate with other rural banks to address the challenges facing the BPR industry.

 

Per July 2010, total loans granted by Bank Andara have increased to 131.133 million rupiah from 72.036 million rupiah in December 2009 (increasing to 106.54%). Total loans consist of 122.685 million rupiah (94%) of new wholesale loan intended to BPR and 8.448 million rupiah (6%) remaining old retail credit. Bank Andara's total assets continued to grow into 268.241 million rupiah from 217.228 million at end 2009 (an increase of 23.48%).

 

Total Micro Finance Institutions (MFIs) who became clients of Bank Andara until now amounted to 180 and continue to increase by 105% from 2009. Bank Andara very proud that 30% of its MFIs are pro poor. In accordance with the vision and mission, Bank Andara has demonstrated its desire to help and improve the living standards of poor people in Indonesia with reach more than 900.000 clients of MFIs.

 

Bank Andara also continues to manage with good credit quality. Until now, all wholesale loans granted to rural banks, including the current category and no one including the non-performing loan (NPL). Non-performing loans (NPL) of the banks is 3.46% gross and 0.85% net. On the contrary, at the end of 2009, the ratios of gross and net non-performing loans (NPL) to credit were 5.94% and 0.01%. Bank Andara will continue to maintain that NPL remain low, and also made provision on earning assets (PPAP) is enough to anticipate future credit risk.

 

Bank Andara NPL arising from a long rest of retail credit. Bank Andara continues collection efforts against the rest of the retail credit. More importantly, although the Bank Andara to transform its business model from a business that directly serve the financial needs of micro and small business (retail) into business which position itself as a strategic partner for Microfinance Institutions (MFIs) Indonesia that capable and motivated to serve micro entrepreneurs and poor people.

 

Bank Andara is also working intensively to prepare technology-based banking access for Microfinance Institutions (MFIs) in Indonesia, where in accordance with its social mission to help millions of low income people who do not have access in order to gain access to banking products and financial services through technology-based MFIs in Indonesia.

 

Bank Andara is the first pro poor wholesale commercial bank of its kind in the world. Bank Andara has an important role as a strategic partner for the microfinance sector in Indonesia and has the full commitment as wholesale institutions that support and serve the microfinance sector in Indonesia so that the microfinance sector can grow and reach more poor people in Indonesia. Together with the microfinance sector in Indonesia, Bank Andara continues to make efforts to fight poverty and improve the welfare of the people of Indonesia, in accordance with the mission of the shareholders include Kreditanstalt für Wiederaufbau (KfW) and International Finance Corporation (IFC).